US trade court orders retroactive solar duties on Southeast Asian imports

From pv magazine USA

The US federal trade court has handed an unreserved victory to plaintiffs in a case that argued a two-year Biden-administration moratorium on collections of duties on imports of cells and modules from Southeast Asia was illegal, pv magazine USA has learned.

The US Court of International Trade decision represents a hard blow to developers and importers who brought in huge amounts of low-priced, largely Chinese-made solar imports from Southeast Asia over the two years between June 6, 2022, and June 6, 2024.

The decision means that US Customs and Border Protection (CBP) immediately can begin extracting tens of billions of dollars in duties on cells and modules imported from Cambodia, Malaysia, Thailand and Vietnam during the moratorium.

The Coalition for a Prosperous America, a nonprofit organization that backs policy to bolster US manufacturing, agriculture and labor, this past spring said it conservatively estimated that the retroactively applied tariffs could capture $54 billion for the US Treasury, according to its report titled “Revenue Impact of Retroactive Duties on U.S. Solar Imports under the 2022-2024 Tariff Moratorium.”

The report also found that retroactive assessment of moratorium duties could “level the playing field for American solar producers who have struggled against subsidized and artificially low-priced imports linked directly to China.”

“It’s a clear win,” Thomas Beline, attorney for plaintiffs Auxin Solar Inc. and Concept Clean Energy Inc., told pv magazine USA. The two companies backed the legal challenge of the moratorium’s suspension of duty collections.

The case pivoted on the legality of federal Proclamation 10414, a Biden administration order to create a two-year emergency moratorium on collections of anti-dumping and anti-subsidy duties on solar cells and modules from the four Southeast Asian countries.

The moratorium’s emergency intent was to keep import channels flowing to support the US solar deployment, though the US government had preliminarily found that Chinese companies were using the Southeast Asian countries to circumvent existing tariffs. A coalition of companies led by Auxin Solar, Qcells and First Solar had brought the Southeast Asian so-called anti-circumvention cases.

As a result of the moratorium, the US Department of Commerce directed CBP to stop collecting duties during the two-year pause.

Auxin Solar and Concept Clean Energy challenged the moratorium, asserting that Biden’s suspension of duties exceeded his presidential authority and Commerce’s implementation of the duty suspension was unlawful. The plaintiffs contended that the moratorium unfairly permitted imports priced at unfairly low levels to enter the US market and undermine the domestic manufacturing industry.

The plaintiffs’ victory means the US government must vacate all duty-suspension measures in the case and collect duties on all imports yet to be cleared of tariffs that were brought into the country during the moratorium.

These duties could cause extensive pain and uncertainty for importers, developers and utilities who channeled the low-priced gear into projects that are now completed, as duties totaling up to more than 200% of the imports’ values may be collected.

For relevant moratorium importers as a group, duty exposure could be considerable, Beline said. “Even within the current tariff regime, it’s a ton.”

Defending participants in the moratorium case now can appeal the decision to the US Court of Appeals for the Federal Circuit, ask for a stay on duty collections pending appeal or pursue political avenues for quashing them. They include the American Clean Power Association, BYD Co., Canadian Solar, Invenergy Renewables, NextEra Energy Inc., Risen Solar Technology, the Solar Energy Industries Association and Trina Solar Inc.

Beline suggested that the decision stands as an object lesson about the risks of reckless profit-taking amid a time of trade disputation. “People got drunk and disorderly during this period of time,” though, he said, “taking prices that low is not a good idea.”

In effect, Beline also said, the court found that the US president has the prerogative to declare an industrial-trade emergency but not to abrogate duty impositions already on the books, he said.

“It was a very poor decision at the time, and hopefully this won’t happen again,” Beline said.

The court recently released a bare-minimum outline of its decision. A complete decision, excluding information deemed to be confidential, is expected out by week’s end on the court’s web listing of opinions.

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